America leads the way in the demand side response (DSR) market, but in the UK the landscape is changing fast as businesses quickly come round to the fact that there are potentially major benefits from becoming involved in the sector. Erik Nygard, co-founder of Limejump, explains.
At my company, Limejump, we provide a cloud-based online service that connects software to smart meters and smart control devices. We use big data technology to analyse data including the weather and relevant market prices and market mechanisms. It means we can help businesses proactively manage their flexibility in electricity usage or switch to on-site generation at peak times.
We are able to show customers where they are paying too much for their energy, and how they can generate the most revenue from selling electricity back to the grid.
This not only drives cost savings and generates new revenues, it also helps in supporting a sustainable energy future. It’s not just about money. It’s about participating in supporting the grid system, and ultimately helping the environment by contributing to the reduction in carbon emissions.
The knowledge is building
Limejump works with organisations across all sectors, from schools to large manufacturing facilities. Individually, many customers use smaller amounts of energy which do not have much of an impact compared to large industrial sites. However, by coming together and joining the Limejump ‘virtual power plant’, organisations are able to make a difference in helping balance the electricity grid – competing directly against large power plants.
Not surprisingly, some energy managers need some hand-holding when it comes to understanding the detail of what’s on the markets – that’s down to the complexity of the products on offer. But knowledge is building, and with our software platform stakeholders are able to see, in real time, the shifts in the energy markets and the potential savings which can be made.
The challenges ahead
There’s clearly great potential in the market, but there are barriers too. Grid operators are facing problems as the current infrastructure is not fit-for-purpose considering the changing nature of how electricity is generated on the system. There needs to be more investment and improvements to meet the increasingly variable supply and demand conditions. And we need more transparency in the market, with a centralised database source for the demand side.
There’s clearly great potential in the market, but there are barriers too.
Meanwhile, the traditional role of the demand response aggregators is one that can reconcile the conflicting needs of buyers and load providers. Buyers like National Grid need guaranteed availability of the loads within the agreed response time. Providers on the other hand need to be properly compensated for being available and for offering flexibility – plus participation in DSR should have limited impact on their core operations.
Instead of giving load providers – essentially their customers – a one-size-fits-all solution, it’s time buyers provided a truly ‘smart energy solution’. Tapping into the synergy of big data analytics and cloud computing, it is possible to create an online platform that allows customers to monitor and choose what demand response programme they wish to participate in.
Dynamic one-stop energy management tools which can react to pricing opportunities have been developed and adopted in the States. In the UK, this type of energy solution is developing quickly. We have been listening to customers’ needs and tailoring our energy management platform.
We know customers are demanding more data on their energy consumption and pricing transparency. A centralised data source would help massively in this area. To have that information at their fingertips will only make businesses more committed to demand response.